The new mental model for leading organizations into the future.
Companies today are faced with a false choice: Perform harder or transform faster? In reality, there is no choice. In a world of daily disruption, companies must do both.
Leaders of today and the future must redefine performance to include transformation within performance metrics.
The Fortune 1000 companies around the world we’ve been working with lately are struggling with simultaneously performing and transforming. They’re also wondering if their teams have the capabilities needed to carry their businesses forward successfully into an unknown future.
Two currently competing mindsets
We’ve been seeing a tug-of-war of leadership mindsets, leading to conflict.
Some leaders are doubling down on a performance mindset. Their approach is, “We’ve got the people and skills that have always worked before—everyone just needs to work harder (e.g., “We don’t have time to pause and innovate. Triple the effort, triple the output. Make the numbers!”).
It’s tempting to rely on what’s worked in the past: Certainty, control, speed, and grind. But this model sacrifices what’s needed for future success in an exponentially changing world.
Other leaders are committed to a transformation mindset, This approach accounts for needed future innovation but risks falling behind on results in a “slow down now to speed up later” fashion (e.g., “We must step back, pause, reimagine, and reinvent. What got us here won’t get us there!”).
Both mindsets are valid, but both are flawed, if done in isolation. Few companies know how to do both well.
The new model: Transforming Performance
What is needed is a shift in mental models—from performance as optimization to performance as evolution. In a world that demands agility, reinvention, and resilience, performance can no longer be defined by only short-term metrics and efficiency.
The old model was a machine programmed to produce the same outputs repeatedly, fast, and at scale. The new model must be a living organism—agile, adaptable, and evolving.
The new model must reframe performance itself. It has to ask: What (or whom) are we performing for? Are we just running harder in old models or building the future with intention?
Performance must fuel transformation.
Redefining what performance means
As we’ve shown, old-school performance metrics (like transactions, efficiency, and margins) aren’t enough anymore.
The world is too dynamic and complex for only predictable measures of success.
Performance must now include transformation efforts:
- Strategic clarity that flexes with context.
- Cultural resilience that withstands disruption.
- Adaptive capacity that senses and responds in real time.
- Transformative agility that reinvents as needed.
Transforming performance capabilities
Leaders can no longer include transformation as a separate initiative. They need to evolve the essential capabilities for success and include those that lead to transformation.
Transforming performance capabilities include:
- Traditional capabilities (e.g., setting goals, hitting numbers, being efficient).
These honor and bring forward the best of past achievements and include:
- Goal setting & accountability
- Operational efficiency
- Financial discipline
- Quality execution
- Risk management
- Evolving capabilities (e.g., learning, agility, cultural resilience).
These lean into what is most important and necessary in the now and include:
- Team resilience & wellbeing
- Customer-centric agility
- Inclusive culture & belonging
- Talent development & learning
- Cross-functional collaboration
- Transformative capabilities (e.g., navigating change, sensing and responding to shifting markets, aligning culture with future strategy).
These help future-proof your company.
- Strategic adaptability
- Innovation & experimentation
- Change leadership
- Ecosystem thinking
- Organizational renewal (e.g., redesigning structures or models)
Each company defines its own version of these, but the key is to see them all as forms of performance, not separate capability categories of “hard” vs “soft” or “old” vs “new.”
A tool to map the shift: The Performance Transformation (PT) Matrix
We use a powerful diagnostic tool called the Performance Transformation (PT) Matrix to help companies make transformation a tangible part of day-to-day operations.
The PT Matrix maps organizational capabilities across two dimensions:
Priority – How essential is this capability for current and future success?
Competence – How strong is the organization at delivering this capability?
The PT Matrix is developed in four zones:
Zone 1: Peak Performance High Priority / High Competence
| Zone 2: Growth Edge High Priority / Low Competence
|
Zone 3: Streamline or Systematize Low Priority / High Competence
| Zone 4: Let Go or Reassess Low Priority / Low Competence
|
Whether innovation, agility, or cultural renewal, every capability can now be seen as a form of performance.
This reframe unlocks a more integrated, future-ready definition of success.
Creating your PT Matrix
Step 1: Define your performance capabilities.
Co-create a list of your business’s top 10–15 essential capabilities. Include traditional, evolving, and transformative elements. Make sure they reflect what’s truly needed to succeed now and in the future.
Step 2: Rate each capability.
Using input from leadership and key teams (via a survey, workshop, or leadership dialogue):
Priority (High/Low): How critical is this to current and future success?
Competence (High/Low): How strong are we at this today?
Step 3: Map the capabilities to the matrix.
Plot each capability into one of the four quadrants:
Zone 1: Keep building on strengths.
Zone 2: Invest deeply—this is your transformation frontier.
Zone 3: Maintain, systematize, or streamline.
Zone 4: Consider letting go or reassigning.
Step 4: Take strategic action.
Use the matrix to align your strategy:
- Where should you invest resources, leadership, and learning?
- Where should you shift focus or reallocate?
- Where should you redesign your performance narrative?
- Which of your “core strengths” are no longer as critical?
- What capabilities do you talk about, but haven’t built muscle around?
- Where are you over-focusing on capabilities that no longer drive success?
- What does excellent performance mean in the next three years, not the last three?
Example PT Matrix to transform systems
In this example, a mid-sized financial services firm we’ll call “Ascenda” needs to transform digitally to unlock growth and ensure its business is future-proofed. The organization is growing rapidly, and it must onboard new talent while upskilling current talent to drive the business’s success.
Zone 1: Peak Performance High Priority / High Competence
| Zone 2: Growth Edge High Priority / Low Competence
|
Zone 3: Streamline or Systematize Low Priority / High Competence
| Zone 4: Let Go or Reassess Low Priority / Low Competence
|
Example PT Matrix to transform capabilities
In this example, the same mid-sized financial services firm Ascenda is rapidly scaling, driving a crucial need to cultivate internal talent and attract skilled professionals. To achieve future-proofed growth, Ascenda must prioritize people capabilities, strengthening existing and emerging competencies.
Zone 1: Peak Performance High Priority / High Competence
| Zone 2: Growth Edge High Priority / Low Competence
|
Zone 3: Streamline or Systematize Low Priority / High Competence
| Zone 4: Let Go or Reassess Low Priority / Low Competence
|
For leaders on the edge of what’s next
“Transforming performance” is the evolved ambidextrous ability to deliver today while designing tomorrow.
Performance isn’t just about outputs—it’s about the capacity to evolve. The old model was a machine. The new model is a living organism.
Remember that small, daily, intentional performance transformations will, over time, add up to growth, scale, profitability, and future-readiness.
The most successful companies of the next decade won’t just hit their numbers—they’ll transform what those numbers mean with courage. Will yours?
Writers and contributors: Kyle Hermans, Mark Bonchek, Shannon Geher, and Fin (research and organization)
